China would continue to invest more in new computer chipmaking equipment than any other geographical region this year, despite a significant year-over-year decline, followed by South Korea and Taiwan, industry group SEMI said in a report yesterday.
In its fabrication plant spending forecast, SEMI said global investments in gear would rise 2 percent this year to US$110 billion, the sixth consecutive year in a row of growth, due to investment in tools needed to make chips for artificial intelligence (AI).
The impact of AI would likely be even stronger next year, SEMI added, when investment is expected to grow by another 18 percent.
Photo: AFP
China is the largest consumer of chips, and firms there have been expanding chipmaking capacity for years, but they began a huge sprint in mid-2023 and last year with government support, as part of a drive to lessen dependence on imported chips in response to restrictions imposed by the US government.
ASML Holding NV, the largest chip equipment manufacturer, forecasts sales of 32 billion to 38 billion euros (US$34.5 billion to US$40.9 billion) for this year, implying market share of more than 25 percent for its sub-sector, lithography, where it enjoys a dominant position.
Other top equipment firms include Applied Materials Inc, KLA Corp, LAM Research Corp and Tokyo Electron Ltd, though Chinese equipment makers such as Naura Technology Group Co (北方華創), Advanced Micro-Fabrication Equipment Inc (AMEC, 中微半導體) and Huawei Technologies Co (華為) affiliate SiCarrier Technologies Co (新凱來) are growing fast.
Photo: AFP
Chinese spending is expected to fall to US$38 billion this year, down 24 percent from US$50 billion last year, but still ahead of US$21.5 billion in South Korea, where SK Hynix Inc and Samsung Electronics Co are expanding capacity for memory chips.
Spending in Taiwan, where leading foundry Taiwan Semiconductor Manufacturing Co (台積電) manufactures AI chips for Nvidia Corp and others, is projected at US$21 billion.
Among other regions, the Americas and Japan are each expected to spend US$14 billion this yaer, while Europe would spend US$9 billion, SEMI said.
AI SPLURGE: The four major US tech companies have lost more than US$950 billion in value since releasing earnings and outlooks, while equipment makers were gaining Four of the biggest US technology companies together have forecast capital expenditures that would reach about US$650 billion this year — a flood of cash earmarked for new data centers and all the gear within them. The spending planned by Alphabet Inc, Amazon.com Inc, Meta Platforms Inc and Microsoft Corp, all in pursuit of dominance in the still-nascent market for artificial intelligence (AI) tools, is a boom without a parallel this century. Each of the companies’ estimates for this year is expected either near or surpass their budgets for the past three years combined. They would set a high-watermark for capital spending
China’s top chipmaker has warned that breakaway spending on artificial intelligence (AI) chips is bringing forward years of future demand, raising the risk that some data centers could sit idle. “Companies would love to build 10 years’ worth of data center capacity within one or two years,” Semiconductor Manufacturing International Corp (SMIC, 中芯) cochief executive officer Zhao Haijun (趙海軍) said yesterday on a call with analysts. “As for what exactly these data centers will do, that hasn’t been fully thought through.” Moody’s Ratings projects that AI-related infrastructure investment would exceed US$3 trillion over the next five years, as developers pour eye-watering sums
Bank of America Corp nearly doubled its forecast for the nation’s economic growth this year, adding to a slew of upgrades even after a rip-roaring last year propelled by demand for artificial intelligence (AI). The firm lifted its projection to 8 percent from 4.5 percent on “relentless global demand” for the hardware that Taiwanese companies make, according to a note dated yesterday by analysts including Xiaoqing Pi (皮曉青). Taiwan’s GDP expanded 8.63 percent last year, the fastest pace since 2010. The increase “reflects our sustained optimism over Taiwan’s technology driven expansion and is reinforced by several recent developments,” including a more stable currency,
COLLABORATION: Taiwan and the US could jointly find solutions to weaknesses in supply chain resilience for critical materials, focusing on mining and initial refinement Taiwan is likely to purchase rare earths from the US in the future, and is also in talks with Australia and Canada to strengthen global rare earth supply chain security, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. Taiwan and the US last month concluded the sixth Economic Prosperity Partnership Dialogue, during which both sides signed a joint statement endorsing the principles of the Pax Silica Declaration, pledging to deepen cooperation in areas including critical minerals. At the time, Kung said the two sides would establish working groups to advance cooperation in areas including artificial intelligence, digital infrastructure, critical materials and
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